- 93% of the surveyed investors still consider Switzerland an attractive or very attractive location for real estate investments in 2025.
- 60% of respondents expect an increasing investment volume for 2025. Only 5% of the surveyed investors believe that the investment volume will decline.
- Residential properties remain the most popular asset class. Around 74% of respondents indicate that they are strongly focusing their investments on residential properties.
- 37% of respondents actively use AI for processing image, speech, and audio data. Last year, it was only 6%.
- As in the previous year, 97% of respondents see demographic development as the most important megatrend for the Swiss real estate market.
Zurich, 14 January 2025 – The latest edition of the Trend Barometer for the real estate investment market clearly shows: 93% of the surveyed real estate investors still consider Switzerland an attractive or very attractive location for real estate investments in 2025. This can be attributed to the stable economy and the still lucrative location despite geopolitical changes. Compared to the previous year, a slight decrease in attractiveness is generally expected (2023: 98%). While 38% of investors rated the market as very attractive in last year's survey, this year it is 35%.
60% of respondents expect an increasing investment volume for 2025. According to the survey participants, this assessment can primarily be explained by the interest rate cuts carried out over the past year. Only 5% of the surveyed investors agree that the investment volume will decline in 2025. The previous year's figure was significantly higher at 18%.
This confidence is also reflected in the question of whether real estate will be the preferred asset class in 2025: The vast majority of respondents (89%) indicate that this is the case. Only 11% of the surveyed investors state that real estate is not their preferred asset class.
The study results are based on a survey conducted in November 2024, in which 106 real estate experts and investors who have been active in the Swiss real estate market in recent years participated. These include banks, insurance companies, pension funds, real estate funds, investment foundations, real estate companies, developers, real estate service providers, family offices, and wealthy private investors.
Investors believe in the increasing attractiveness of Swiss real estate
85% of the surveyed investors believe that the attractiveness of real estate compared to alternative asset classes will increase again in 2025. "This result demonstrates a remarkable consensus regarding the assessment of future developments in the real estate investment market and reveals the collective confidence that investors place in the asset class of real estate," says Daniel Zaugg, Sector Leader Real Estate, Construction & Building Material at EY in Switzerland. Around 79% of respondents predict that the number of portfolio transactions will increase again in 2025. "This assessment indicates a market recovery compared to the caution observed in the previous year regarding future market developments," says Zaugg.
The majority of respondents (84%) fully or somewhat agree that returns seem to be stabilizing across the major usage classes and that no further price declines are expected in 2025. 80% of respondents expect that the environment for project developers will remain challenging in 2025. Regarding the question of whether the interest rate cut is a breakthrough for the industry, opinions are divided. Around 52% of respondents believe that the interest rate cut is not yet a breakthrough, while around 48% believe it is.
Residential properties remain the investment focus, especially in sub-centers, logistics, and office properties gain popularity
Residential properties remain the most popular asset class. With around 74% of respondents, more investors also indicate that they are strongly focusing their investments on residential properties (previous year: 67%). At the top 9 locations (Basel, Bern, Geneva, Lausanne, Lugano, Lucerne, St. Gallen, Zug, and Zurich), the investment focus of the surveyed investors is on residential properties (58%), followed by office properties (27%).
Outside the top 9 locations, the investment focus is even stronger on residential properties at 79%, while office and retail properties are in less demand, reaching 11% and 10%, respectively. "The fact that the focus outside the cities is even more on residential properties aligns with the findings of the roundtables conducted in advance of the Trend Barometer with a total of 19 players from the Swiss real estate industry. Rent regulations and objections make construction projects difficult, especially in cities like Geneva and Basel, and strict approval practices and noise protection regulations make inner-city densification and achieving climate goals challenging. Therefore, respondents are increasingly focusing on residential properties outside the major cities," says Erik Ganz, Director Real Estate Assurance Financial Services and Advisory at EY in Switzerland.
The vast majority of respondents (96%) agree or somewhat agree that investing in multi-family houses is still seen as a safe investment strategy, which implies an increase in investment volume. Compared to the previous year, there is an increased investment tendency in the areas of logistics and office properties (plus 9 to 10 percentage points). 52% and 48% of respondents, respectively, indicate that these usage types are in their investment focus. Logistics properties are thus the second most popular asset class among investors. Also in demand are operator properties such as data centers and life science/health care properties. Although hotels and shopping centers show a slight increase, they are still only of minor focus for investors. "Despite the uncertainty caused by home office and hybrid work models, office properties are slightly gaining favor with investors compared to the previous year (plus 1 place). For international tenants of office spaces, sustainability certificates are essential. Investors expect stable or even slightly rising prices, especially for modern office properties in central locations," says Ganz.
Nevertheless, office spaces should still be assessed with caution on a case-by-case basis: When asked which property classes will be particularly in the investment focus at the Swiss top 9 locations, office properties lose focus everywhere except in Zug and Lugano. The largest decline in focus on office properties is observed in Bern and Lausanne (-7%). Meanwhile, retail properties are gaining attention at all locations. The largest increase is seen in Basel and Bern (+12%).
The use of artificial intelligence is increasing, and sustainability remains a topic
37% of respondents already actively use AI for processing image, speech, and audio data. For another 28% of respondents, the use of AI in this field is in planning. "This is remarkable considering that only 6% of the surveyed real estate players indicated last year that they actively use AI in their company. A significant portion of the survey participants seems to have responded flexibly and quickly in the area of AI or intends to do so. Despite the positive study results, the Swiss real estate world is still in its infancy regarding AI, and there is a lack of reliable use cases. The industry is challenged to keep pace with developments in other industries," says Ganz.
In the area of data analysis and processing – for example, for customer, market, and transaction data – 26% of respondents already actively use AI, and another 33% plan to use AI in this regard. While AI is making its way into the operational business of real estate players, sustainability remains a topic: 88% of respondents indicate that the price difference between "green" and "brown" properties will continue to increase. 77% of respondents believe that the introduction of binding minimum standards for energy efficiency in residential buildings creates planning security for modernization measures. About 71% of respondents believe that energy efficiency and taxonomy compliance increase property value and enable cost-effective financing.
Megatrends: Demographic change remains the most important, interest rate development displaces sustainability
The vast majority of respondents (97%) predict that demographic changes will have a significant impact on the Swiss real estate market in the coming years. As in the previous year, demographic development is again seen as the most important megatrend for the Swiss real estate market.
Around 87% of surveyed investors consider future interest rate developments as a megatrend that will strongly influence the Swiss real estate market in the next five to ten years. Thus, interest rate development overtakes the megatrend of climate change and ESG and is considered the second most important megatrend for the Swiss real estate market. Instead of 91% last year, this year only 83% of respondents believe that climate change and ESG will have a significant impact on the Swiss real estate market in the next five to ten years.